Excerpt from the simple dollar:
While there’s no denying that Disney vacations are expensive, there are plenty of ways to save money on your trip. Stay in an off-site condo instead of a hotel, for example, and you can make your own meals while scoring a lower nightly rate. Use credit card rewards to book your hotel or flights, and you can whittle down the costs of your trip tremendously. Visit the park for multiple days and your average daily cost for park tickets will plummet.
While all of this is true, a Disney World vacation is still never cheap. One-day tickets start at around $100, and you still have to pay for transportation, stay somewhere nearby, and keep the family fed and entertained. Plus, there are a number of add-ons that can make a trip to Disney World or Disneyland considerably more expensive – things like character dinners, souvenirs, and Park Hopper passes.
Simply put, a trip to Disney World is an expense you need to start planning for – and saving for – ahead of time.
The Benefits of a Disney Vacation Account
And it’s the huge expense of a Disney vacation that has people going to great lengths to save. To get an idea of how much a full-fledged Disney vacation will cost, you can use their website cost estimator.
For my family of four to take a five-day vacation with four days at the park, spending $200 per day on food, $1,200 on airfare, and $300 in miscellaneous spending, Disney estimates our trip would cost around $4,760. If we started saving $200 per month now, it would take two full years to save enough for our trip!
To save up enough cash, many families set up a dedicated Disney Vacation Account. Similar to a traditional savings account, Disney vacation accounts allow you to stash money away incrementally over time.
With a Disney Vacation Account, you can estimate your vacation costs, create a savings plan, track your progress, and pay for your trip. For added convenience, you can load your account with debit cards, credit cards, and even Disney gift cards purchased yourself or received as a gift.
This last part is a huge perk. If you receive Disney gift cards over the holidays, for example, you can load them into your Disney account and track them all in one place. If you have a rewards-earning credit card and can score “extra points” on Disney gift cards, on the other hand, you can build your vacation account and boost your rewards at the same time.
As an added bonus, there are no fees for maintaining or setting up a Disney vacation account. Plus, you’ll get a $20 Disney gift card for every $1,000 you spend on qualified vacation purchases, provided your account is open at least 120 days (with a total household limit of $500 in gift cards). That’s a nice 2% kickback, though it’s only valid for Disney purchases.
The plan also offers an automatic savings program that will auto-debit your account until you reach your goal. And if your trip plans fall through at any time, you can receive a refund in your original form of payment at any time.
The Downside of a Disney Vacation Account
Unfortunately, the benefits of using a Disney Vacation account end right about there. Beyond the fact you can pool gift cards and park your cash in one place, there are few ways a Disney Vacation Account can actually help you.
First off, Disney Vacation Accounts don’t pay any interest on your deposits. If you’re saving several thousand dollars for a few years or longer, this is an important distinction to make. With a high-yield savings account, you could earn interest on your money and grow your savings faster. With a Disney Vacation Account, on the other hand, financial benefits are limited to the $20 in Disney gift cards you get for every $1,000 you spend on a qualified vacation package.
Another downside is the lack of flexibility Disney Vacation Accounts offer. Most notably, you can only use money saved in these accounts to book Disney World vacation packages. If you found a cheap hotel deal outside of the park, for example, you would be unable to use your Disney Vacation account funds to cover the expense. A vacation condo outside of the resort? You’ll have to pay for that with money saved elsewhere, too.
You can use your Disney account funds to cover air and ground transportation, but only if booked as part of a Disney vacation package. So, if you shop around and find a better deal on standalone airfare through Kayak or Priceline, you wouldn’t be able to use your Disney Vacation account funds to cover it.
The absolute worst part about the Disney Vacation Account, however, at least in my mind, is the fact you can’t actually use your funds once you arrive at the park. While you can book and prepay for a Disney meal plan before you start your vacation, you can’t use the money to pay for other food purchases while you’re there. And if you charge anything to your room at the resort, you can’t use your Disney Vacation account funds to cover it.
Skip the Disney Vacation Account, and Do This Instead
While saving up for the huge expense of a Disney trip is definitely a smart move, there are better ways to leverage your funds than setting up a Disney Vacation Account. In fact, the best option for your money is a high-yield savings account.
With a traditional or online savings account, you will earn interest on every deposit you make. This interest can help your savings keep up with inflation and, of course, boost your balance over time.
Another benefit from opening a traditional savings account instead of a dedicated Disney account is that you can use the funds to construct any type of Disney vacation you choose. With your money parked in a regular account, you can shop around for the best deals and cheapest flights, potentially book an off-site hotel to save money, and use your savings to cover food and entertainment spending during your trip. And, of course, if there’s money left in the account after your vacation, it’s yours to spend any way you want.
In my eyes, the Disney Vacation Account is nothing more than a feel-good ploy. They offer a convenient place to stash your money, but hardly any benefits to make doing so worthwhile. If you’re heading to Walt Disney World or Disneyland, or planning any other type of Disney trip, you’ll be a lot better off saving your money in a targeted account that earns interest and lets you remain in control.
Holly Johnson is an award-winning personal finance writer who is obsessed with frugality, budgeting, and travel. She blogs at ClubThrifty.com and teaches others how to write online at EarnMoreWriting.com.